How much it costs me to run my SaaS's in 2024

Summary

In this video, tech founder and Senior Software Engineer Anthony shares an in-depth breakdown of the costs associated with running a tech startup. He discusses two of his ventures, an Esports startup and a new influencer marketing platform, detailing monthly expenses such as AWS, Heroku, Versal, and other tools. Anthony emphasizes the importance of optimizing costs, recommends alternatives to AWS, and shares insights on managing overages and selecting the right tech stack. His goal is to inform and guide those curious about the financial aspects of tech startups.

Takeaways

• 😀 The speaker, Anthony, is a tech founder and Senior Software Engineer who shares insights on the cost of running tech startups.
• 💻 Anthony has experience with two tech startups, one an Esports startup and another a platform for marketers to find influencers.
• 💰 The older Esports startup has reduced its AWS costs from $600-$700 to $250 a month by moving services off AWS, with the remaining cost for an RDS Postgres database.
• 🔧 Heroku is used for backend services and costs around $82 a month for the Esports startup.
• 📊 Versal is used for analytics and costs around $20 per person plus $10 for additional analytics, but has caused unexpected high costs due to overages.
• 🕊️ Upstash is used for caching and costs around $100 a month, helping to manage intensive data aggregation.
• 📝 Better Stack Logs is used for logging and costs $85 a month, offering great support which Anthony highly recommends.
• 🌐 Cloudflare is recommended for domain hosting and DNS, with a Pro Plan costing $20 a month.
• 🚀 For the newer startup, Anthony avoids AWS, using a simple Heroku runner for $10 a month and Verso for $20 a month.
• 🎨 Figma is used for UX designs and is praised for its generous free tier, suitable for extensive design work.
• 🔗 Superbase is used for the new startup's database needs, with costs varying based on the number of records.
• 📈 PostHog is suggested for logging and feature flagging, with a generous free tier suitable for many startups.
• 🛒 Stripe is used for payment processing with fees based on a percentage of transactions, beneficial for businesses with frequent payments.
• 📈 The total monthly cost to run the Esports startup is $600, which Anthony considers reasonable for the scale of the application.
• 💡 Anthony emphasizes the importance of using free tiers and the right tools to keep startup costs low, highlighting the benefits of being a programmer and understanding industry tools.

Q & A

What is the main focus of Anthony's first tech startup?

Anthony's first tech startup is an Esports startup focused on the game Valorant, where they cover all the matches and provide services to professional teams, including analyzing a large number of series played within the Valorant scene.

How many Heroku instances does Anthony's startup use and what is the cost?

Anthony's startup uses around four or five Heroku instances to handle various different backend tasks, such as getting data from different sources and running Discord bots. The cost for Heroku instances is approximately $82 a month.

What is the main issue Anthony faced with Versal's billing system?

Anthony faced significant overages with Versal's billing system when his site was DDoSed, causing the backend to crash and the frontend to hang, which resulted in excessive serverless function running times. This led to extra charges of $400 in one month and $600 in another due to exceeding the free limit of GB hours.

What is the role of Upstash in Anthony's startup?

Upstash is used for caching in Anthony's startup. It caches the most popular pages over the last 30 days to reduce the intense data aggregation on the backend that would otherwise be required to constantly pull data for viewers.

How much does Better Stack Logs cost for Anthony's startup and what do they use it for?

Anthony's startup pays $85 a month for Better Stack Logs. They use it for logging to ensure that if anything goes wrong, they can track down where the issue is, which saves them time during debugging.

Why does Anthony recommend Cloudflare for domain hosting?

Anthony recommends Cloudflare for domain hosting because it offers peace of mind, ease of use, and additional security features like the 'under attack' mode, which helped him keep his site running during a DDoS attack.

What is the total monthly cost to run Anthony's first tech startup?

The total monthly cost to run Anthony's first tech startup is $600, which includes various services like AWS, Heroku, Versal, Uptime Robot, Upstash, Better Stack Logs, and Cloudflare.

What is the main purpose of Anthony's new startup?

Anthony's new startup is designed to help marketers find influencers to work with by allowing them to search up influencer and creator profiles and view past advertisements and brand collaborations.

How much does Anthony's new startup cost in terms of AWS usage?

Anthony's new startup does not use AWS, as they have a simple Heroku runner for the backend, which costs only $10 a month.

What is the cost of Verso for Anthony's new startup?

The cost of Verso for Anthony's new startup is between $10 and $20 a month, which is for the basic Pro Plan.

What is the cost of AI training on data for Anthony's new startup?

The cost of AI training on data for Anthony's new startup was a significant upfront cost, with an ongoing cost of $30 a month.

What payment processing service does Anthony use and how does it charge fees?

Anthony uses Stripe to collect payments from teams and marketers. Stripe charges a percentage of the transaction amount plus a small flat fee on top of it, with no flat monthly fee.

What is the estimated cost for a new SaaS startup if coded by the founders themselves?

If the founders code the startup themselves and do not use a subscription to a no-code tool, the estimated cost could be under $50, mainly covering the domain and possibly cloud hosting like Cloudflare.

Outlines

00:00

💻 Tech Startup Costs Breakdown

Anthony, a tech founder and senior software engineer, shares his experience running two tech startups. He discusses the costs involved in maintaining an Esports startup focused on the game 'Valerant'. The platform includes a data team, heavy compute processes, and various services for professional teams. Initially, AWS was the primary hosting service, costing around $600-$700 per month, but costs were reduced to $250 per month after migrating most services off AWS. The remaining AWS cost is for an RDS PostgreSQL database storing extensive match data. Other costs include Heroku instances for backend services, Versal for analytics, and various other tools and services like Uptime Robot, Upstash for caching, and Better Stack for logging. Anthony emphasizes the importance of optimizing code and services to manage costs effectively.

05:02

🚀 Running Costs for Established and New Tech Startups

The speaker provides an in-depth analysis of the operational costs for his established Esports startup and his new venture. For the Esports startup, he details the cost breakdown, including AWS, Heroku, Versal, and other services, which total around $600 per month. He also shares a cautionary tale about unexpected overages with Versal due to a DDoS attack, which significantly increased costs temporarily. For the new startup, which is a platform for marketers to find influencers, he explains that costs are minimal, with a simple Heroku backend and Versal hosting. He also mentions the use of Figma for design, Superbase for database management, and PostHog for logging, emphasizing the affordability and efficiency of these tools for new startups.

10:02

🛠️ Tools and Strategies for Cost-Effective Startups

Anthony concludes the video by discussing the tools and strategies he uses to keep his startups cost-effective. He recommends avoiding AWS for new developers and suggests using GitLab for deployments and CI/CD, which he has used extensively without cost. For the new startup, he highlights the use of free tiers and affordable services like Heroku, Versal, Figma, Superbase, PostHog, and Cloudflare. He also mentions the use of AI training for his data and Stripe for payment processing. Anthony advises that with the right knowledge and tools, it's possible to host a new startup for under $50 per month, emphasizing the benefits of building and managing the startups personally.

Keywords

💡Tech Startup

A 'Tech Startup' refers to a new business venture that leverages technology and innovation to offer products or services, often in the software or internet-related sectors. In the video, the speaker discusses the costs associated with running two different tech startups, illustrating the financial aspects of establishing and maintaining such businesses.

💡Esports

Esports is a form of competition using video games, where players or teams compete at a professional level. The speaker mentions an Esports startup focused on 'Valorant,' a specific video game, indicating the niche market their first startup serves and the type of data and services they provide.

💡AWS (Amazon Web Services)

AWS is a comprehensive cloud computing platform provided by Amazon that offers a range of services including data storage, databases, and computing power. The speaker initially used AWS for their startup but later moved most services off AWS due to cost and preference for other solutions.

💡Heroku

Heroku is a cloud platform that lets companies build, deliver, monitor, and scale apps. In the script, Heroku is mentioned as a platform hosting several instances for backend services, such as data fetching and Discord bots, emphasizing its role in the operation of the startup.

💡Versal

Versal is an online learning platform that allows for the creation of interactive courses and content. The speaker discusses Versal's role in analytics and its cost structure, including issues with overages that led to unexpectedly high charges for their startup.

💡Data Aggregation

Data aggregation is the process of collecting data from multiple sources and combining it into one location for analysis and reporting. The video mentions data aggregation in the context of compiling and analyzing large volumes of gaming data for the Esports startup.

💡DDoS (Distributed Denial of Service)

A DDoS attack is a malicious attempt to disrupt the normal traffic of a network, service, or website by overwhelming it with a flood of internet traffic. The speaker recounts an incident where their site was targeted by a DDoS attack, leading to significant costs due to service overages.

💡Cloudflare

Cloudflare is a web performance and security company that provides CDN services, DNS resolution, and DDoS protection. The speaker recommends using Cloudflare for domain hosting and DNS due to its security features and reliability, especially in the face of a DDoS attack.

💡Superbase

Superbase is a serverless database that allows developers to build applications with ease. The speaker mentions using Superbase for their new startup, highlighting its cost-effectiveness and performance for handling large volumes of data.

💡Influencer Marketing

Influencer marketing is a form of marketing where influencers—individuals with a following on social media—promote products or services to their audience. The speaker's new startup is designed to help marketers find influencers for collaborations, indicating the growing importance of social media in marketing strategies.

💡PostHog

PostHog is an open-source product analytics tool that helps track user behavior within applications. The speaker suggests PostHog for logging and monitoring various aspects of their startup, noting its generous free tier and its popularity among startup companies.

Highlights

Anthony, a tech founder and Senior software engineer, shares the cost breakdown of running two tech startups.

The first startup is an Esports platform for the game Valorant, with a data team of 10 maintaining the platform.

The platform analyzes hundreds of thousands of series played annually in the Valorant scene.

Server costs for the Esports startup are surprisingly low, with AWS costs reduced from $600-$700 to $250 a month.

Heroku is used for backend services, costing around $82 a month.

Versal is used for analytics and costs $20 per person with an additional $10 for analytics features.

Versal's overages due to DDoS attacks led to unexpected charges of $400 extra in one month.

Upstash is used for caching, with a monthly cost of $100 for the pay-as-you-go plan.

Better Stack Logs is used for logging, with a $85 a month plan for peace of mind during debugging.

Cloudflare is recommended for domain hosting and DNS records, with a Pro Plan costing $20 a month.

The total monthly cost to run the Esports startup is $600, including various services and tools.

GitLab is praised for its free services, including CI/CD and private repos, being better than GitHub.

The new startup focuses on influencer marketing, with a simple website and Heroku backend.

AWS is not used in the new startup due to cost-effective alternatives.

Superbase is used for database management, with a higher tier for performance on dynamic queries.

PostHog is recommended for logging and tracking within startups, with a generous free tier.

UI frameworks like Shards and Tremor are free and should not incur costs.

Stripe is used for payment processing with a percentage-based fee and no flat monthly charge.

The new startup's costs are significantly lower, with a focus on cost-effective tools and services.

Transcripts

hello everyone welcome back to the

channel my name is Anthony I'm a tech

founder and Senior software engineer and

today I'm going to break down the cost

of running a tech startup now I've

started one Tech startup four years ago

and it is still running to this day and

I just started another one a couple

weeks ago and I'm going to run you

through and break down the cost for both

of those and I think you'll be surprised

by the numbers and if you like this

content make sure you subscribe I talk

about tech startups all the time and

just Tech memes in general and stuff and

if you have any comments and want me to

cover other stuff and you're curious

about other things let me know in the

comments so first let's cover the

startup that I made like four years ago

it is an Esports startup and as you can

see it looks kind of simple it's for an

ort named valerant and essentially we

cover all the matches now there's a lot

going on here there's like I think nine

active repos that support this

development um we charge professional

teams for all kinds of like services and

there is a lot of heavy compute

processes going on here we are doing

things like analyzing hundreds of

thousands of series that get played

every single year within the valerent

scene scrims that are private to teams

also get tracked and sent to our servers

and we just have a lot of stuff going on

here we have like a data team of around

10 people working around the clock to

support and maintain all the data on

this platform now you might think

something like this costs a lot to run

in terms of software but it's actually

kind of cheap in terms of server cost so

let me break this down number one we

have AWS when I first started this uh

platform four years ago I had everything

on AWS the deployment the site the back

and everything I have since moved almost

everything I can off of AWS our AWS Bill

used to be around $600 to $700 a month

and after moving everything off it is

now only $250 a month and that $250 is

essentially for an RDS pretty much a

postgress database that stores like

hundreds of gigabytes of data on it like

we literally have every single valerant

competitive valerant match that has been

played within the last four years pretty

much since the game has started in our

database it's the biggest valerant

database of matches like I think that

anyone has um for competitive matches

and it only costs us $250 a month so

while I hate AWS for almost everything

else and if you are a new developer or

someone that's creating something for

the first time and deploying it I have

been using AWS for the past like almost

10 years now and I would highly

recommend steering clear of it if you

can and even for a database you'll see

in in the later part of this video I

don't even use AWS anymore but if you

can just stay away from AWS it is such a

pain to work with and there are

individual solutions that do everything

that AWS can do but better cheaper and a

lot more easier and way less time

involved um trust me the next is for

Heroku we have around like I think maybe

four or five Heroku instances up and

running to handle various different

things and these are just like node

backends that support getting data from

different places because we have so much

data coming in from different sources so

many data is going out we have a lot of

stuff that happens on Discord where we

have Heroku Bots um that are our Discord

Bots essentially and they run on Heroku

so Heroku roughly costs us about $82 a

month um then we have versal so versal

is a pretty cheap cost

until they charge you overages which I

have an interesting story about but

pretty much it's just me and my other

co-founder so I think it's like $20 a

person for the Pro Plan or something and

then we pay $10 on top of that just for

analytics which is sort of like Google

analytics um it just tells you how many

visitors come to your site and stuff

like that so it's not too bad however

versal has been by far the most

egregious when it comes to overages and

charging you and I know they made a

pricing change to help this but one

month we had a bunch of people dossing

our site um and wanted done happening is

they sort of caused our back end to

crash and because our back end crashed

our front end would sort of hang trying

to get data from the back end and when

your front end makes a request on the

server side it's making that request

through versal and each one of those

requests would hang for 30 seconds which

means versal would have one of their

serverless functions running for 30

seconds at every single request and what

that means is essentially you get 1,000

GB hours for free on the Pro Plan but

then every 100 extra gigb on top of that

is $40 which means if you hit your limit

every 10% of what the original limit was

is an additional $40 which is an entire

month cost and when we got dos that one

month over like 3 days we went over this

like limit by like I think 1,000 Gaby

hours which means we got charged an

extra $400 by versal and I reached out

with the to them and I tried to explain

our situation and they just never

responded and I reached out to them

twice because this happened on two

separate occasions and it was just

insane we ended up paying like $600 one

month and I think $400 another month

because of these overages so I have been

pretty uh not happy with versal the way

they did their billing and stuff like

that I think I remember seeing a Twitter

thread where they were thinking of

changing it so it might get better in

the future but versal it's like they

make it look so simple with like $20 a

month but then once you start getting

users and for reference like our site

gets around 500,000 page views a month

once you start getting a couple of users

and stuff like that and if any anything

in your code is not perfectly optimized

for like all these random standards

they've set up for what they're going to

charge you extra for there will come a

time where you will probably get charged

extra from versal and that's just a

matter of fact and um I love versal it's

so easy to they make it like seamless to

use they may nextjs who doesn't like

nextjs other than a lot of people but

their pricing and the way they did that

is kind of horrendous and they make it

so easy to sort of fall into that pit

trap and they're very unresponsive about

it I reached out twice nobody responded

on to the next thing because I could ort

of complain about versal for a very long

time we have uptime robot this is just

something that helps us monitor uptime

for our site you probably don't need it

if you are a newer site because your

site's probably not going down too much

but we pay $10 a month for this and it

pretty much just tells us whenever the

site's going down next we have up stash

up stash is where we do our caching so

because our SAS has so many pages one

for each Series so there's something

like I think maybe 2 80,000 Pages for

rib. I think it's more than that the

last time I checked like how many pages

Google is indexed we pretty much cash

the most popular pages over the last 30

days because it's a lot of intense data

aggregation on the back end to

constantly pull that data over and over

again for all the people that are

viewing it so we use a reddis uh to cash

our stuff and we use up sash with redus

a lot of the times we've gone over our

cap and our budget and they'll send us

emails and stuff like that and they'll

degrade our performance but we found a

good metal around with paying $100 which

I think is part of the pay as you go

plan um and and it's been fine so far

next we have better stack logs this is

what we use for our logging and stuff

like that and honestly the free tier is

insanely good the only reason we're on

the small team thing is because every

time somebody Vis starts our site we do

a bunch of logging just to like make

sure if anything does go wrong we can

track down where it is it saves us a ton

of time when debugging over the past

four years you can imagine the site has

gone down a lot of times and we have

spent a lot a lot of hours midnight

overnight to try and figure out what's

going on and fix it so we pay pay for

the Peace of Mind of not having to worry

about not being able to reproduce

something or seeing what happens we have

a lot of logs and because of that we

have to pay for the $85 a month plan but

the support from better stack is one of

the best supports I've ever seen in my

life um I've been talking to the team

for the past like 3 months because we

had an issue with our billing and they

have been absolutely phenomenal to work

with so I highly recommend using better

stack for logging you could probably get

away with their free tier it's extremely

generous lastly we have Cloud flare I

talked a bit about this in my other

video of Tech stack but I recommend

buying your domain through cloudflare

and I recommend just going onto the Pro

Plan um I don't know why it's like not

showing up over here but essentially the

Pro Plan is like by far more than good

enough it's like $20 a month and it

gives you so much great stuff um for it

and cloudflare is like the best place

you can host your domain the best place

to like Point DNS records over to your

like hosting providers and stuff like

that when we were under attack I told

you we had in in another video I

mentioned it I had to switch us over to

cloudflare and then use their under

attack mode to get the site up and

running so that I could later on figure

out a more long-term solution to deal

with the dsing but having your domain on

cloud flare gives you so much peace of

mind in the long term it's the easiest

thing to work with they have unlimited

features in case you need additional

things don't use GoDaddy don't use name

cheep don't use AWS definitely don't use

any other way to buy your domain get

Cloud flare I guarantee you it just buys

you so much peace of mind that brings

our total to $600 a month to run this

startup that brings in a decent amount

of money just from people using our

analytics it has a Discord bot um that

people interact with on the daily basis

it does hardcore data aggregation it has

a whole like custom CMS that I built for

10 plus people at a time to be entering

data into the database and managing data

it's a giant application and $600 a

month is pretty good I think in my

opinion um at some point in time it was

a lot higher than this and then we took

a lot of measures like I said we moved

out of of AWS blah blah blah to to

reduce that cost um I should also

mention a lot of our deployments was

done through gitlab which I have paid

nothing for gitlab and I have used their

cicd we have almost 100 I have made

almost 100 private repos on gitlab and I

have like five private mpm packages on

gitlab and I've never paid a dollar they

are by far better than GitHub I highly

recommend it now let's talk about the

pricing for my new startup so this is

probably going to even be a bit more

than like what you guys would pay if you

are creating something especially if

it's a project if you are doing just

like a personal project or you're

launching your first website and it's

not that complicated you probably are

paying almost nothing at all if anything

so first of all let's talk about AWS I

don't use AWS like I said for anything

in my new startup and I'll just um go

ahead and show you the website very

simple website very simple startup it

allows you to search up an in influencer

Creator's profile you get a bunch of

information on them you can search up

for advertisements that brands have done

in the past and it's to help marketers

essentially find like influencers to

work with so that's what the idea is and

while there is a lot of like background

processing going on it's very cheap

background processing so um we don't

need AWS we just have a simple Heroku

runner for a backend and I explained

this more in my other video um if you're

interested in looking at it the video

where I talked about the actual like

Tech stack um you can see why I'm using

Heroku but it's a basic Runner and it's

just $10 a month it's super cheap uh

super performant you probably don't need

to go past the $10 a month one now for

Verso we pay 10 $20 a month it's just

like the B basic Pro Plan um so it is

pretty cheap we use figma to create all

our ux designs I have another video on

that as well figma is great because

while it has a free tier that might feel

limiting you can sort of just create as

much as you want within that free tier

like they give you access to three pages

but the pages are infinite so you can

create like whatever you want in those

three pages so I don't think you have to

pay for figma it's a great tool by far

if you're going to do any ux work it's

like the tool you should use there's no

XD that or anything else like that that

comes close to how good figma is super

base you will probably be on the free

tier if you're using superbase and you

don't have a lot of Records while this

company is new we already have 65,000

records of Instagram users and out of

those 65,000 users I think we have

225,000 U media objects so like

Instagram posts across all of those

users and because we're querying quite

dynamically across those records we have

also records for like in embeddings

which are some like uh AI thing across

all of them as well so we have almost

like a million uh within a month we got

up to like a million records in our

database and that's why I upgraded us to

a higher tier database just so it's a

bit more performant and it's faster but

if you're like doing stuff where you're

only like storing maybe like 50,000

records at most in your database you

could probably get away with just not

even paying for super base so like right

here like superbase I think probably

Heroku um and like like maybe all this

Miss stuff which we'll talk about in the

SEC is probably going to be nothing um

for you guys if you're just running like

a basic startup or like your first

project and stuff like that we haven't

integrated post hog yet but I have

talked to some of the guys there and the

free tier is extremely generous it's

sort of like better stack it helps you

like keep track of logs and keep track

of like a couple of different things

within your startup they actually

provide a lot of different um plans and

and things that they allow you to record

and it's something that like the

majority of why combinator sasses end up

using and a lot of them are still in the

free tier so I'd recommend checking out

post hog if you need anything related to

logging and stuff like that um and even

like deployment stuff I think they have

like deployment AB testing for feature

Flags if you're into that type of stuff

so there's a lot of great stuff there I

recommend checking it out um Cloud flare

I talked about this $20 a month so worth

it um definitely doing it the UI

Frameworks like you know Shad CN or like

Tremor and stuff like that those are all

free you shouldn't ever pay for a UI

framework or a UI template or something

like that um there's enough free stuff

out there for you to use and finally we

have some mys expenses like we had to do

a lot of AI training on our data um so

it was a big upfront cost and on the

ongoing cost it's like $30 a month and

for our other company we use stripe to

collect payments from teams and we'll

probably use stripe again to collect

payments from marketers and they don't

charge a flat fee the fee is usually a

percentage of the transaction plus a

small flat fee on top of it so no flat

monthly fee um and as long as you're

charging like more than like $4 to $5

per

use or whatever stripee is like pretty

good to go with the transaction fee the

flat transaction fee doesn't really do

too much for you so I would have to

estimate if you guys are starting your

first SASS and stuff like that and all

honestly if you're coding it yourself

and you're not like using a subscription

to like bubble or some no code tool and

stuff like that you can get away with

like only paying for the domain

cloudfront maybe like versal to host the

thing in production properly and that's

probably it honestly um you can get away

with hosting like a brand new startup

for under $50 and that's the beauty of

being a programmer and building

something yourselves and knowing a lot

about like the industry and what tools

are available out there because nowadays

A lot of these tools they get you hooked

by giving you that free tier and then

they they grow in Revenue as your

business grows in uh volume so as soon

as you start getting more customers and

stuff like that that's when these guys

start to take a cut but hopefully by

then you're making enough money to cover

that anyways and if you enjoy this video

let me know sub leave a comment and I'll

see you guys in the next one